€40bn industry lost if energy crisis left to spiral
Tuesday August 08 2006
The Government was yesterday warned to tackle our mounting energy crisis or face the prospect of multi-national pharmaceutical and chemical firms pulling out of the country.
Future investment and job creation could be at risk unless the Government fosters competitiveness in the energy market and produces a long-term plan on energy needs.
Investment in biofuels, greater energy efficiency in buildings and tax credits for using environmentally-sound energy sources were needed to show companies that the Government was serious about tackling over-dependency on imported fuels.
Employers' group PharmaChemical Ireland said Irish managers were finding it increasingly difficult to justify energy costs to head office.
And it warned that many Irish-based companies would shut down and move to India and the Far East unless the Government secured alternative sources of power.
The Central Statistics Office (CSO) valued exports from pharmaceutical and chemical firms at over €40bn last year.
The sector is the largest contributor of corporation tax and pays over €1.1bn - or one-fifth - of total corporation tax receipts and employs 12,000 people.
Nine of the top 10 pharmaceutical companies in the world have operations in Ireland.
Without this tax contribution, the higher rate of income tax would need to be increased by 6pc to 48pc to fund the exchequer revenue shortfall.
The proposed 34pc increase in gas and 20pc hike in electricity prices expected later this year follows a cumulative 80pc increase in costs over recent years.
"It is becoming increasingly difficult for Irish managers to justify these massive cost hikes to global head offices," said director Matt Moran.
"Unlike other global locations, Ireland is 90pc dependent on imported fossil fuels, particularly gas and oil."
Ireland must move away from its "excessive dependence" on imported fossil fuels by developing indigenous sources of energy including renewables such as wind, biomass, biofuels, wave and tidal power, said Mr Moran.
Natural gas from the Corrib field off Co Mayo should be brought online and further exploration should be carried out along the west coast.
- Paul Melia
